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The Almighty Buck Games

Game Industry Optimistic About Surviving Economic Crisis 52

Posted by Soulskill
from the food-is-boring-buy-a-console dept.
CNet is running a story about how the gaming industry is looking at the recent economic troubles. Despite their status as luxury items, games and game systems have seen strong sales numbers in recent months, and that trend is expected to continue into the holiday season. Most companies are optimistic, despite the fact that many of their stock values have been hit hard and that analysts' views are divided on whether game-related purchases will be one of the first things cut from consumers' budgets. "'I do think that the video game industry is going to do reasonably well in this time of recession because video games are a pretty damned efficient use of time,' said Bridges. 'That said, the...industry has some other problems that it has been ignoring for awhile and that are creeping up on it.' Essentially, Bridges explained, he thinks that the dominance of giant publishers like EA and their general reliance on physical, in-the-box, units, can't hold up. Instead, he said, new tools, ubiquitous broadband and hungry independent developers are going to all combine to eat away at the continued supremacy of the $60 big-name title. And that could spell big trouble for the industry."
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Game Industry Optimistic About Surviving Economic Crisis

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  • by Ostracus (1354233) on Thursday November 27, 2008 @03:18AM (#25906857) Journal

    "'I do think that the video game industry is going to do reasonably well in this time of recession because video games are a pretty damned efficient use of time,' said Bridges."

    Now if we could only convince our parents of this.

    "Essentially, Bridges explained, he thinks that the dominance of giant publishers like EA and their general reliance on physical, in-the-box, units, can't hold up. Instead, he said, new tools, ubiquitous broadband and hungry independent developers are going to all combine to eat away at the continued supremacy of the $60 big-name title. And that could spell big trouble for the industry.""

    Does Valve count as a "big name"?

    • Re: (Score:3, Insightful)

      by GMonkeyLouie (1372035)

      Valve could do better with the whole episodic gaming thing.

      Step one: shorten the time between releases of half life 2 episodes.

      Step two: you don't have to package episode two with another copy of episode one.

      Step three: please for the love of god keep bundling stuff with new innovative brilliant games like portal.

      • by KDR_11k (778916)

        Telltale uses Steam AFAIK and they went through two whole seasons on one of their series while another is at episode 4 out of 5.

        • The Steam/online distribution model, does have some major cost advantages over shop sales. Making CDs/DVDs requires long lead times, from manufacturing order time, to distribution to shops and its always a gamble, as to how many of the final CDs, they will sell in shops, before they end up discounted, in the bargain baskets. So what often happens, is CD re-ordered manufacturing runs don't happen, unless its a clear sales leader.

          But the biggest advantage the Game Industry has is a psychological advantage d
    • Well... (Score:5, Insightful)

      by Moraelin (679338) on Thursday November 27, 2008 @06:43AM (#25907563) Journal

      Well, he's just trying to sound smart, basically.

      There's this thing about the future: nobody knows it. All you can say is, basically: something will happen, but heck if I know what, when or by how much.

      But that doesn't make for much of an article, and sure doesn't make one a well paid "analyst". So essentially you have to do the old trick: tell them an event (e.g., that the indies are going to eat EA's lunch) or a date, but never both. Notice how here he didn't give you a time frame of when will the indies beat EA, nor a quantitative estimate. There is no deadline when you can say, "hah, the date came and went and your prophecy didn't happen." Even in one year, or ten years or a hundred years, you could still nod through the rationale and wait for it to happen any day now.

      Now pack it with a few profound sounding truisms (you can at least nod through the idea that better tools and broadband should make some kind of a difference in some way), and you too can be a pundit or analyst.

      And as an example: it's been proven before that all the analysts in the world can't, for example, pick stocks better than throwing darts at a list of them. For all that handwaving and sounding smart and in the know, they don't know what will happen. But there the big broker names have the advantage of being able to pull self-fulfilling prophecies: if Merril-Lynch tells you to buy Pets.com stock, they must know something, so a lot of people do. Price goes up, yay, they were so smart. The best illustration of this was during the dot-con crash when they told people to buy stock they internally rated as crap and were selling as fast as possible. But they still influenced the market enough to make money even out of companies which were in free fall.

      But in the game industry they just don't have this kind of influence. Just because pundit X and analyst Y say that indies must overtake EA due to better tools and broadband, it doesn't mean that anyone will go and write those better tools overnight.

      So we're back to that thing about the future: they have no flipping clue. But they sound smart, people read the article, and they get advertising revenue for it.

  • Instead, he said, new tools, ubiquitous broadband and hungry independent developers are going to all combine to eat away at the continued supremacy of the $60 big-name title.

    Cool, I hope to be one of those hungry indie developers. =)

    • Re: (Score:3, Funny)

      by ciderVisor (1318765)

      Cool, I hope to be one of those hungry indie developers. =)

      Cool ! I've been waiting years for the console version of Hungry Hungry Hippos.

  • by PhrostyMcByte (589271) <phrosty@gmail.com> on Thursday November 27, 2008 @03:43AM (#25906933) Homepage
    Not every game is a Half-Life 2 or Bioshock. As the economy constricts cashflow from these companies, we just have to hope they still have the willingness to spend a little extra time and money making a great game.
    • Re: (Score:2, Interesting)

      by GMonkeyLouie (1372035)

      Not a concern to me, as I think that the industry will be made better if games have to spend less time in the tube.

      Constricted cash flow for industry giants and consumers --> more small, short projects and smaller (but more) purchases made by consumers --> more room for smaller independent developers to compete and more room for innovation in the market.

      As a man who came into video games in the era of adventure games with shitty graphics that survived on intuitive interfaces and a good sense of humor,

      • by Sparton (1358159)

        Not a concern to me, as I think that the industry will be made better if games have to spend less time in the tube.

        I don't think I can agree with you. See, what constricted cash flow more likely does is scare a lot of developers that if they do innovation, there's a high chance of bombing it and not having a hope in gaining back what they spent, but if you go for low-risk, tried-and-true, you're guaranteed to get something to get you by.

        That said, I am a game designer and a gamer, and I don't know any other gamer who thinks they'll be spending less on games in the near future (MMO factor aside).

        • Re: (Score:2, Insightful)

          by KDR_11k (778916)

          Then again they have a completely fucked up view of low-risk which apparently involves spending most of the company's money on a single game and hoping it sells enough to make the money back.

      • Re: (Score:3, Interesting)

        by hairyfeet (841228)

        I just hope it means they will spend more on gameplay and less on flashy graphics crap. I mean seriously, look at how many truly great games were made with the Quake 2 and 3 engines. Were they real flashy and made everyone go "ooh pretty"? Nope, but they made up for it by actually trying to make games that were FUN. I am so damned tired of FPS that look really good but play like shit because they spent every dime on the "ooh pretty" and didn't have anything left for such things as decent AI or a good story.

        • Re: (Score:3, Insightful)

          by Psychochild (64124)

          I'm an independent, professional game developer. I don't mean to attack you directly, but you're saying some things that seem logical but that the market doesn't really follow up on. I am one of the few people for whom graphics truly do not matter, and the game I run, Meridian 59 [meridian59.com], is a game where I hoped fun would matter more than graphics.

          I just hope it means they will spend more on gameplay and less on flashy graphics crap. I mean seriously, look at how many truly great games were made with the Quake

          • by hairyfeet (841228)

            Sorry, but the style of game you make I can't stand, nothing personal, so I can't really comment on it. The reason I mentioned the Quake 2 and Quake 3 engines was because they were surpassed in the "ooh pretty" pretty quickly yet games were selling quite well based on those engines for a long time afterwards. Why? Because they brought the FUN. Of course you aren't selling to those that go for the "ooh pretty" and base their purchases on that alone. But I have a dirty little secret nobody likes to admit. Wit

            • Sorry, but the style of game you make I can't stand, nothing personal, so I can't really comment on it.

              That's fine. As I said, it's a niche game. My point isn't, "ZOMG PLAY MY GAME!" but rather, you need to make sure you really are supporting people who make games like you want. If you see someone making an interesting independent FPS, go support that person. Just because the graphics are DOOM style and they don't have aimed shots doesn't meant they will never make a better game. But, they probably won'

              • by hairyfeet (841228)

                I do buy the little games, and recently bought "Terra Wars:NY Invasion" even those it brings a new meaning to the word cheese. You ever sit and laugh at Chingrish? Imagine a whole game where all the dialog is in chingrish and acted by those who speak English as maybe a fourth language and probably work in the mail room. Still, it tried something different and was at the $20 sweet spot so I didn't mind taking a shot on some cheese. Which of course simply doesn't happen at the $60 price point. Most folks I kn

    • Take a look at IGN's "top 100 video games of all time" list, or even read some of the endless posts on the subject here on /.
      The Very best games usually have very little to do with a developer pouring buckets of money into a concept; the best games involve a good idea, and the developer managing to find a way to make the game playable.
      Some games, I admit, do have to have big budgets, simply because the gameplay is tied into an expensive feature. a good example is GTA3; without decent graphics, the game woul

      • OpenGL is apparently more of a pain to develop for than DirectX (I've never tried DirectX so I don't know).

        As was pointed out to myself here on /. : consoles have a much larger market and earn way more money than releasing on PC or Mac.

        In these days of consoles with built in networking and storage, you could easily make console games that allow you to use mods. That was what tipped me over the edge to becoming a console gamer. That and that I got sick fed up of MS pushing Vista so hard and decided I had to

        • OpenGL is apparently more of a pain to develop for than DirectX (I've never tried DirectX so I don't know).

          OpenGL is a pita because it's quite a fragmented API due to the extension mechanism. Most games however don't use either - instead they'll use the low level API's provided for the console.

          In these days of consoles with built in networking and storage, you could easily make console games that allow you to use mods.

          Not that easily at all. First you need to distribute the console SDK + compilers etc. Then you've got to assume that all the people using the SDK are genuine nice people, and aren't using it to either crack the Game, or hack it for cheating. You also have to realise that even armed with that SDK, there are very few peopl

          • Well, depending on the system you use for making mods, you might not need to have any knowledge of how to code for PS3. Quake 1 at least had its own C based scripting language, making all mods for it basically cross-platform by default. With a system with as many cores as the PS3, dedicating one SPE just for interpreting scripting would mean less of a performance hit than if you only had one core like in the Quake days.

            By Quake III it did use compiled DLLs though, so they were platform specific, but I think

        • by paganizer (566360)

          "As was pointed out to myself here on /. : consoles have a much larger market and earn way more money than releasing on PC or Mac."

          You realize that is a odd thing to say, right?
          Sure, there are a lot of consoles out there. But Everyone has a PC or a Mac. the problem is that there is such a gigantic range of variations in the type of systems that people have.
          If you design a game to play on a PC with a 16mb graphics card, and OpenGL w/out extensions, it would play on I would guess 95% of the PC's in use; If yo

          • Actually I think installing PlayTV on PS3 will be even easier than setting up your own system - plug in USB tuner to aerial and PS3, run the setup CD, done. I always imagined setting up a PC based PVR would be quite a bit of effort if only because you have to find a nice quiet PC, get a TV card, get MythTV or some other PVR distro or app for Windows.. the things that the PS3 doesn't do that a PC could do, is access network shares, and stream media to other devices. I'm not bothered about the streaming, but

          • Everyone has a PC or a Mac.

            But not everyone has four PCs or Macs to set up a LAN. Console games let four players look at one screen. (I admit that the setup is not ideal for first-person shooters, but not all shooters are first-person, and not all games are shooters.) It would be possible to play multiplayer games on a PC and an HDTV, but PC games tend to ignore this possibility because not everyone has an HDTV, let alone an HDTV in the same room as the PC.

            • by paganizer (566360)

              I just don't have a snappy comeback for that one.
              There were quite a few games that came out in the early 90's designed to be played by two players on one computer, but it is a smaller screen usually, and the developers just don't do it anymore anyway.
              and while most computers these days have a TV screen output, I doubt that my before mentioned 95% do; maybe more like 65%.
              So, you are right on that possibly; people who participate regularly in social gaming, with more than 1 or 2 players sitting in the same ho

              • The ONLY reason that my kids will switch inputs from the HP media center to the Playstation would be to play Rock Band, and there is no REAL reason that they have to do this, the only reason is that the game developers haven't released it for PC.

                Part of that might have to do with the fact that unlike DDR, key-sounded music games such as Guitar Hero and Rock Band need really low audio latency. But low-latency audio outputs are harder to get on a PC, which is designed to mix in a Winamp that's been buffered 2 seconds ahead, than on a single-tasking console. Not every sound card has an ASIO driver.

      • Develop for OpenGL graphics on computers, not consoles.

        But how many people have an HDTV (not a CRT SDTV), and how many of those have connected a PC to their HDTV? In this economic downturn, not all families can afford one PC per player, and without a large monitor such as an HDTV, it's difficult to fit four people around one monitor to play a multiplayer party-style game. (Not all shooters are first-person.) The advantage of consoles is that 1. they are guaranteed to have easy SDTV output, and 2. more of your customers think to connect a console than a PC to a

  • simpler explanation (Score:3, Interesting)

    by ILuvRamen (1026668) on Thursday November 27, 2008 @03:53AM (#25906963)
    there's all that psychological "people want video games to make themselves happy during a recession" stuff and then there's reality. It's really quite simple: Teenagers buy most video games. Teenagers don't have investments and mortgages that tanked nor are they good at saving instead of spending. Thus, game sales are doing just fine. But of course if the marketing and finance departments at video game companies said that the boss would think they weren't working very hard.
    • there's all that psychological "people want video games to make themselves happy during a recession" stuff

      Exactly. In fact, most things that are designed to make people forget about their problems do very well indeed during periods of economic downturn For example, at the poker club I play at, we've been seeing a lot more people coming in to become members lately. We used to have a steady number of 20/25 players twice a week, and the past weeks, we've seen upward of 45 players coming in. What's more, they t

      • by tcopeland (32225)

        > most things that are designed to make people forget about their problems do
        > very well indeed during periods of economic downturn

        Not to pile on, but yup, here's still more supporting evidence of that in reference to the movie industry [seekingalpha.com].

      • by Daengbo (523424)
        In Korea, the sale of soju (the local hard liquor) is seen as an indicator of consumer confidence in the economy, so is treated as a leading indicator. When confidence is high, Koreans tend to buy more imported alcohol like scotch. When people feel economic pressure, the sale of soju skyrockets.

        Drinking lots of grain alcohol will help you forget just about anything, including a bad economy.
    • by AKAImBatman (238306) * <akaimbatman@gmail.cFREEBSDom minus bsd> on Thursday November 27, 2008 @04:26AM (#25907083) Homepage Journal

      It's really quite simple: Teenagers buy most video games. Teenagers don't have investments and mortgages that tanked nor are they good at saving instead of spending.

      Teenagers have not bought the most video games in quite a long time. In fact, the average age is 30 [archive.org] with 65% of game players over the age of 18. If the video game industry were to see a drop in buyers over the age of 18, they would suffer just as greatly as the rest of the economy.

      I know the entertainment aspect may seem like too easy of an answer, but the historical data does support it.

      During the beginning of the Great Depression, one of the most popular forms of entertainment was dancing. It usually only cost a few cents to get into a dance hall. Once there, the dancer could remain for most of the night. This was so economical that it led to a new form of sport: Marathon Dancing [historylink.org].

      At first this extreme form of dancing was done to achieve new records. Then the dance halls started to get in on the act, and began promoting competitions. Soon, dancers would be on the floor for months at a time, with only 15 minute breaks every hour or so. (Yes, 24x7 on the floor. They slept like wolves at best!) These long marathons gave dance halls the opportunity to encourage or stage situations worthy of a soap-opera. Fights broke out, relationships came and went, people struggled not to lose their cool over the grinding months, and even weddings were performed on the floor!

      The public just ate this stuff up. They spent their nickels to visit these dance halls for entertainment. If they were hungry enough, they might even try their hand at a marathon. While the lack of sleep was a killer, dance halls regularly served 12 meals a day! Quite a difference from standing in a bread line for a meager meal.

      Eventually, dance was replaced with another non-stop form of entertainment: Movies.

      You know the stereotype of the Bell Boy with his flashlight leading people into the dark theater? Well, there's good reason for that. Back during the depression, the movies never stopped! For a mere nickel you could visit the movies and watch for hours before it looped back to something you had seen before. News reels, Comedies, Cartoons, Features, etc. It was a true potpourri of entertainment. And since there was no television to compete, visiting the theater was one of the best ways of keeping abreast of the latest news and entertainment.

      Speaking of television, yet another form of entertainment took a bite out of the market during the Depression. Radio saw a surge in public life. From comedy, to the original soap operas, to FDR's Fireside Chats, to Late Breaking News, to Orson Wells' War of The Worlds broadcast, radio was an incredible escape from the ugliness of everyday life. And every family who could manage to scrape together enough money had one.

      I won't bore you with further details, but such a trend for escapist entertainment is seen throughout modern history. The worse things get, the more we turn to outlets for escape. With television on the decline, I see absolutely no reason why consumers would not find value in Video Games. They are the newest and hottest form of escapist medium. Eventually they too will be replaced by a new medium, but for now it's reasonably safe to bet on video games during any period of strong economic downturn. :-)

      • Re: (Score:2, Informative)

        by nyu2 (1263642)
        Another thing that will see no downswing is the illegal drug industry. Drugs also offer escapism.
      • by godfra (839112)
        Mod parent up! Really interesting post, well done.
      • by phorm (591458)

        Where exactly do they get the numbers on who's buying the games anyhow? From the credit-card companies? From the little cards or surveys that almost nobody ever files in?

        And who's to say that a lot of games bought by adults aren't for teens (especially around Christmas, etc)?

      • Yes, the average gamer is not a teenager any longer. He's in his thirties and getting older. Today's teenagers rather consume whatever the internet offers and thus have little time left for the feeble games.
    • It's really quite simple: Teenagers buy most video games.

      Can we get a citation on this? I'm certainly not in that category, and I doubt I'm alone on that. In fact [theaveragegamer.com], one figure I just found says the average game player is 33, and the average game buyer is 40. Still, a recession or even depression isn't going to kill video games. It may have a minor effect on huge-budget mass-market "moneymakers" (Fifa, Madden et al), but the real gems will be successful unless we find ourselves significantly further in the toilet.

  • Having been kicking around the industry for more years than I care to remember (approaching my third decade in it, in fact), the thing that really concerns me is not the drop in retail sales. We've seen that game sales *are* fairly buoyant in economic downturns. They fall off, sure, but not compared to other so-called luxury goods.

    Nope - the thing that concerns me is that with games costing more and more to produce, the perceived value of a developer and/or publisher by the stock market can basically fall t

    • Re: (Score:3, Interesting)

      by KDR_11k (778916)

      Perhaps they should dial down the game budgets then, I'm pretty sure those new market games Nintendo is making aren't exactly costing tens of millions.

      • Nope, but even if a Wii game is projected to cost 1million, you still need to raise that capital in order to develop it. That's likely to be the biggest challenge at the moment...
        • by KDR_11k (778916)

          Most established developers and publishers with a console license should be able to scrounge a million together, the ones that can't probably have even lower dev costs.

  • by dolphinling (720774) on Thursday November 27, 2008 @04:04AM (#25907009) Homepage Journal
    "Could spell big trouble for the industry"? Perhaps you mean "could spell big trouble for companies that try to keep using outdated methods"?
  • *NEW* From Rockstar Games, "Zombies of the Economic Apocalypse!"
  • What?? (Score:5, Insightful)

    by Xest (935314) on Thursday November 27, 2008 @04:49AM (#25907165)

    "Essentially, Bridges explained, he thinks that the dominance of giant publishers like EA and their general reliance on physical, in-the-box, units, can't hold up. Instead, he said, new tools, ubiquitous broadband and hungry independent developers are going to all combine to eat away at the continued supremacy of the $60 big-name title. And that could spell big trouble for the industry."

    That doesn't make any sense, independent game developers are still part of the industry, so if there is simply a rebalancing of cash flow from the big companies to the indies the industry hasn't been harmed in the slightest, it's dynamic has simply changed.

    EA and co. could completely die and the industry wouldn't be harmed if more games were being sold by indies at lower prices to make up the same level of profits.

    • Problem with EA going under, as I have been told, is that they are the only company that can afford to train people who are new to the industry. Since I am an avid EA-hater myself, I don't necessarily see this as a good enough reason to let them survive ;)
    • EA and co. could completely die and the industry wouldn't be harmed if more games were being sold by indies at lower prices to make up the same level of profits.

      While you present a true statement, the scenario is nearly impossible. It would take an unprecedented amount of development for even the largest sector of indie gaming (casual @ ~$2.2 billion) to make up the ~$16 billion the mainstream games industry accounts for.

      Yes, if indies made up the difference, the amount of money would even out. (That's the definition of "making up the difference.") But that's not going to happen anytime soon. Thanks for playing!

  • Just 4 months ago I joined the worlds largest browser game company as an ActionScript 3 developer. They've grown from 2 employees in 2003 to 155 when I came and ~170 right now and plan to expand to approx. 300+ in 2009. The games are free, only turning of adds or buying small extra features is our source of income. Our current growth rate is insane and I expect it to gain even more due to mobile MMO-gaming in the next 2 years or so. This kinda fits the articles prediction.

  • The LEGO company was founded by a Danish carpenter who changed a lot of his product mix to wooden children's toys during the Great Depression, later (post-WWII) diversifying into plastic toys.

    The point is the same: (relatively) cheap entertainment will still sell.

  • Though unemployment also increases the temptation towards game piracy.

Somebody ought to cross ball point pens with coat hangers so that the pens will multiply instead of disappear.

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